Олександр Сич
August 7, 2026
Ukraine is a participant in the CRS, the automatic exchange of banking information between more than 120 countries; Switzerland joined the scheme in 2026. Undeclared foreign income may result in the imposition of an 18% personal income tax + 5% military levy, as well as a fine and interest. A tax assessment notice may be appealed within 6 months (without a prior complaint to the State Tax Service) or within 1 month (following an administrative appeal) — this is the position of the Grand Chamber of the Supreme Court in case No. 500/2276/24.
‘How did the tax authorities find out about my account in Poland?’ — this is the question that now opens almost every second consultation with individuals. Since autumn 2024, Ukraine has been receiving data on its residents’ foreign accounts automatically, under the CRS standard, and by 2026 the State Tax Service had already accumulated two years’ worth of such data. From 1 August 2026, this was supplemented by data exchange with the border service. There is no longer any reason to expect that no one will find out about your foreign income.
This article explains exactly how the State Tax Service finds out about income abroad, what to do if you have already received a tax assessment notice (PPR), and when additional tax assessments can actually be cancelled. If the situation has already escalated into a dispute, please also see the service page for a tax dispute solicitor.
How the State Tax Service finds out about your foreign income
The tax authorities have several sources:
- CRS exchange. Every year, foreign banks and financial institutions send data on non-residents’ accounts — balances, deposits, interest and dividends — to their tax authorities. This data is then automatically forwarded to Ukraine. The exchange covers over 120 jurisdictions, including Switzerland from 2026 onwards, and the reporting requirements also apply to accounts opened before 1 July 2023.
- Data exchange between the State Tax Service and the State Border Guard Service. From 1 August 2026, the tax authorities will have automatic access to data on border crossings — the State Tax Service can see how long a person has actually spent abroad, which directly affects the determination of tax residency.
- Enquiries to a specific country. In addition to the automatic exchange, the State Tax Service may send an individual enquiry regarding a specific taxpayer under double taxation agreements.
A resident of Ukraine pays tax on worldwide income (sub-clause 162.1.1, clause 163.1 of the Tax Code of Ukraine). A salary in Germany, rental income from a flat in Spain, interest on a deposit in Poland — all of this forms part of the tax base in Ukraine if you remain a tax resident there.
Consequences of undeclared foreign income
| Charges | Rate / amount | Basis |
|---|---|---|
| Personal Income Tax | 18% of the income amount | clause 167.1, clause 170.11 of the Tax Code of Ukraine |
| Military levy | 5% | clause 16-1, subsection 10, section XX of the Tax Code of Ukraine |
| Penalty for under-reporting tax liability | 10% (unintentional) / 25% (intentional), 50% for repeat offences | Article 123 of the Tax Code of Ukraine |
| Penalty for failure to submit a tax return | 340 UAH (first offence) | Article 120 of the Tax Code of Ukraine |
| Interest | for each day of delay | Article 129 of the Tax Code of Ukraine |
In total, the additional tax assessment amounts to 23 per cent of the income, plus a fine and interest. This is the upper limit: in many cases, the amount can be significantly reduced or waived.
Step 1. Check whether you are a tax resident of Ukraine at all
Additional tax assessments only apply to residents. The criteria for residency (sub-clause 14.1.213 of the Tax Code of Ukraine) are assessed in sequence: place of residence → centre of vital interests (family, work, business) → staying in Ukraine for 183+ days a year → citizenship. If you have been living abroad for several years, working there, paying taxes there and have moved your family there, there are grounds to consider you a non-resident of Ukraine, whose foreign income the State Tax Service has no right to tax.
This is the strongest line of defence, but it requires evidence: a certificate of tax residency from another country, an employment contract, and a tenancy agreement.
Step 2. Check the credit for tax paid abroad
If you are a resident of Ukraine but have already paid tax on this income abroad, it is credited against your Ukrainian personal income tax under the double taxation agreement (clause 13.4, clause 170.11 of the Tax Code of Ukraine). To claim this credit, you will need a certificate from the foreign tax authority stating the amount of tax paid, which must be legalised or bear an apostille. If 12% was paid in Poland, the difference up to 18% must be paid in Ukraine, rather than the full 18% on top. Unfortunately, the military levy is not credited. If the State Tax Service has assessed the full amount without taking into account the tax paid abroad, this constitutes grounds in itself for an appeal.
Step 3. Choose a strategy: pay within 30 days or appeal
Once you have received a tax assessment notice, you face a choice:
- Accept and pay within 30 days. If the additional charge is essentially correct, paying the agreed amount on time without appealing allows you to avoid some of the penalties — a mechanism the State Tax Service is reluctant to mention. Sometimes this is cheaper than losing a court case.
- Administrative appeal to the State Tax Service of Ukraine — a complaint must be lodged within 10 working days of receiving the tax assessment notice. Free of charge; consideration takes up to 20 calendar days (with the possibility of an extension to 60). Downside: only a small proportion of decisions are overturned. Upside: the liability is suspended whilst the appeal is being considered, and if the appeal is rejected, you have one month left to take the case to court.
- Go straight to court. Without a prior appeal, the time limit for bringing a claim is 6 months from the date of receipt of the tax assessment notice; if administrative appeals have been exhausted — only 1 month after the State Tax Service’s decision (position of the Grand Chamber of the Supreme Court, case No. 500/2276/24). Do not rely on the ‘1,095 days’ mentioned in the old articles — the Supreme Court has rejected this approach.
The court fee for a property-related administrative claim by a natural person is 1 per cent of the amount in dispute, but not less than 0.4 and not more than 5 times the minimum subsistence level (from 1,331.20 to 16,640 UAH in 2026). Filing via the ‘Electronic Court’ system — 20% discount.
What the court checks: typical weaknesses in the State Tax Service’s case
- residency determined purely on a formal basis, without analysing the centre of vital interests;
- income calculated based on account turnover rather than actual income — proceeds from the sale of personal belongings, debt repayments and remittances from family do not constitute income;
- tax paid abroad has not been taken into account;
- the procedure for the audit or service of the tax assessment notice was breached;
- exchange rate adjustments were made incorrectly.
Individuals are challenging additional tax assessments more frequently than they did a year or two ago, and the courts are setting aside both the tax liabilities themselves and the fines and interest. There is one condition: a weakness in the State Tax Service’s case must be found in the facts, procedure or legal classification.
When a solicitor is not needed
If the additional tax assessment is small, the income was genuine and you did not pay tax abroad — it is simpler to pay within 30 days and settle the matter. You need a solicitor when the amount is substantial, when there are arguments regarding non-residency or the crediting of foreign tax, or when the State Tax Service has calculated ‘income’ from all deposits into the account indiscriminately.
Questions and Answers
Can the tax authorities really see my overseas account?
Yes. Under the CRS standard, foreign banks submit data annually on the accounts of Ukrainian residents — balances and transactions. The exchange covers over 120 countries, including Switzerland from 2026 onwards.
I have been living abroad for three years. Do I have to pay tax in Ukraine?
It depends on your residency status. If the centre of your vital interests (family, work, home) has moved abroad and you spend most of the year there, there are strong grounds for considering you a non-resident of Ukraine, and your foreign income is not taxable in Ukraine. However, you must provide documentary evidence of this status.
I have already paid tax on my salary abroad. Will I be charged a further 18% in Ukraine?
No, provided there is a double taxation agreement in place, the tax paid abroad will be credited.
You will need a legalised certificate from the foreign tax authority. You will only have to pay the difference (if the foreign tax rate is lower than 18 per cent) and a 5 per cent military levy.
What should you do immediately after receiving the tax assessment notice?
Record the date of receipt — all time limits are calculated from this date. You then have 10 working days to decide whether to lodge an administrative appeal, or 6 months to file a lawsuit. You must not ignore the tax assessment notice: after 30 days without an appeal, the liability will be deemed accepted, and enforcement proceedings will commence.
How long do you have to take the matter to court?
Six months from the date of receiving the tax assessment notice if you have not lodged an appeal with the State Tax Service, and just one month if you have lodged an appeal and it has been rejected. This is the position of the Grand Chamber of the Supreme Court in Case No. 500/2276/24.
Can accounts be frozen for undeclared income?
Once the tax liability has been confirmed and remains unpaid, the State Tax Service acquires the right to impose a tax lien and proceed with recovery. A separate risk involves foreign banks: if KYC data does not match, the bank may itself restrict access to the account.
For what period can additional taxes be assessed?
The general limitation period is 1,095 days (Article 102 of the Tax Code of Ukraine), but this was suspended during the period of martial law; therefore, in practice, the State Tax Service may cover a longer period. The exact duration in your case must be calculated based on the dates of the specific tax liabilities.
Are money transfers from relatives abroad considered income?
No, money transfers from family members are not taxable income. If the State Tax Service has included them in the tax base, this is an error that can be challenged.
How much does it cost to challenge the additional tax assessment in court?
The court fee is 1 per cent of the amount being contested, ranging from 1,331.20 to 16,640 UAH (2026), minus 20 per cent if the case is brought via the ‘Electronic Court’. If you win the case, the court fee and legal costs are recoverable from the State Tax Service.
Is it worth filing a tax return yourself before the State Tax Service gets round to it?
Generally speaking, yes: filing your own tax return (by 1 May, payment by 1 August) resolves the matter without penalties for under-declaration and demonstrates good faith. Before filing, it is worth consulting a lawyer to assess your residency status and the crediting of foreign taxes — to avoid paying more than necessary.
Sources
- Tax Code of Ukraine: sub-clause 14.1.213, Articles 102, 120, 123, 129, clause 170.11 — zakon.rada.gov.ua/laws/show/2755-17
- Resolution of the Plenum of the Supreme Court of 9 July 2025 in Case No. 500/2276/24 (time limits for appealing against tax assessment notices) — reyestr.court.gov.ua
- State Tax Service of Ukraine, section ‘International Automatic Exchange of Information (CRS)’ — tax.gov.ua
- Law of Ukraine ‘On Court Fees’ No. 3674-VI — zakon.rada.gov.ua/laws/show/3674-17
Protection against additional tax assessments with ‘Svarog’
Send us the tax assessment notice and describe the source of the income — we will calculate the actual amount of your liability, taking into account your residency status and taxes paid abroad, and give you an honest assessment: where it is more advantageous to pay within 30 days, and where the additional tax assessment can be cancelled entirely. Related services: tax dispute solicitor, administrative cases, full price list.
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